Can I recover GST/HST on an invoice my customer never pays?

Arsen Accounting Services · Question 145 · Sources checked October 29, 2026

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Potentially, yes. GST/HST previously reported on a credit sale can qualify for a bad-debt adjustment when the required conditions are met. An invoice being overdue is not the same as a debt established and written off as bad.

Check the conditions and original reporting

CRA's regular-method guidance requires that the tax was previously accounted for, the relevant net tax was remitted, the debt was written off in the records, and the parties dealt at arm's length. The adjustment is generally made for the write-off, rather than by reopening the original sales period.

If part of the debt is later recovered, another adjustment may be required. Keep the tax calculation separate from the income-tax treatment of the underlying bad debt.

Official guidance: [1], [2].

Document why collection failed

For example, repeated unpaid reminders do not by themselves identify the final amount to write off. Reconcile partial payments, credits, disputes, and collection evidence first. Then document the decision and date of the write-off.

Prepare the bad-debt package

• Original invoice and GST/HST reporting details.
• Payment history and outstanding balance.
• Collection correspondence and evidence supporting uncollectibility.
• Bookkeeping entry and write-off date.

Ask the preparer to calculate the recoverable tax proportion and check the adjustment deadline. Do not claim the entire tax amount if only part of the invoice remains unpaid. Retain the record after the claim so a later settlement or unexpected payment can be recognized correctly rather than treated as an unrelated deposit.